How to buy property in Spain
If you are considering buying a property in Spain you will need to bear in mind that the legal system and steps to follow are different from those you may have experienced in the UK. It is important to note that while many British nationals enjoy life in Spain, a large number who have bought properties in Spain over recent years now face serious problems with their homes. This guide is intended to help you obtain the information you need to make a full and considered decision about your property purchase in Spain.
See the video on buying property in Spain.
It is advisable to begin with research. A good place to start is the step-by-step guide on how to buy a home in Spain published by The Association of Property and Mercantile Registrars of Spain. You may also find it useful to look at the Residentes Europeos site by the Diputación de Alicante.
Spanish Property Insight provides information and advice on buying a property in Spain. It includes guides to buying property in Spain with information on checks you should carry out before buying a property, including checking the property registry report, title deeds, planning permission and licence of first occupancy, among others.
This guide has information in English on the rights and duties of buyers, when and how you should pay for the property, and useful contact details. This guide also provides information on property taxes, selling a property and letting a property.
It is strongly recommended that you choose a lawyer who is specialised in Spanish land law. The Spanish property conveyancing system is different to the UK and you should ensure that those involved in the transaction are qualified professionals, who have an expert knowledge of how the system works.
Exercise extreme caution if an estate agent, promoter or lawyer urges you to cut corners to save money/time.
If you choose to work with a British estate agent, promoter or lawyer, check that they are qualified, reliable and have experience operating in Spain. Check that they are registered with the Law Society in the UK and specialise in International Transactions.
If your lawyer is based in Spain, check that he/she is registered and practicing with the local Colegio de Abogados (Bar association) by asking for their registration number and verifying this with the Colegio de Abogados. You can find a full list of all the Colegios de Abogados across Spain on the Consejo General de la Abogacia Espanola website.
You should also check that your lawyer has professional indemnity insurance and not sign any papers or hand over any money until you have taken independent legal advice. Please read our advice on seeking independent legal advice and contacting professional associations.
Although the British Embassy cannot recommend a lawyer, we do have lists of local English-speaking lawyers and qualified translators available on our website. See your local consulate pages for details.
Use an independent translator
If you do not have a good understanding of Spanish, make sure that you get all contracts and relevant documentation translated by an independent translator. You can find a list of accredited translators and interpreters in Spain on the Spanish Ministry for Foreign Affairs website.
Use a chartered surveyor
The Royal Institute of Chartered Surveyors (RICS) exists in Spain and there are between 30-40 residential chartered surveyors working across the peninsula and the islands. Members of the RICS are qualified and experienced professionals offering independent and impartial advice.
You can find out more about RICS España and contact details of a chartered surveyor in your area on the RICS website.
The College of Architects in each province also offers a list of independent specialist surveyors.
Before you complete your property purchase you should make sure that:
- you have seen the Land Registry extract (nota simple), available from the Colegio de Registradores (translations into English for an additional fee), and checked the following details:
- the property and land for sale match the details registered and the sellers are the registered owner(s)
- there are no debts or charges, such as a mortgage, on the property
- there are no legal proceedings initiated against the property for contravention of land planning law
- you have checked that planning permissions are in order and the property is a legal build. This is particularly relevant when buying off-plan or direct from a developer. The town hall can inform you whether the building has all licences and permissions and provide details of the type of land. If the property is built on rural land or land that is not classified for construction, additional confirmation should be sought from the regional government as to whether they have authorised the construction
- if you are buying an off-plan property, confirm that the property has been certified as finished by a registered architect and registered as a new build in the property register. The registration should also provide details of the developer’s insurance against structural and other defects in the construction. In the case of a private build (the previous owner built their own house and decided to sell before ten years had lapsed) you will need to request these details separately
- you have checked the latest town plan to see whether or not the plot you wish to buy has any building restrictions, is in a green zone or includes a public pathway or similar. This can be viewed at to the town planning (urbanismo) department of the local town hall
- you have carried out property survey. Whilst this is not obligatory it is wise to get a chartered surveyor to check the property
Make sure you have seen the following documents:
- a paid-up receipt for the previous owner’s annual property tax (IBI). It is also wise to get a certificate from the town hall proving that there are no unpaid rates from previous years
- the Catastral certificate giving the exact boundaries and square metres of your land
- the licence of first occupancy or habitation certificate issued by the town hall. You will need this document to connect to electricity and water companies. Developers cannot force you to complete without this licence.
- receipt to prove all utility bills have been paid by the previous owner
- if applicable, a certificate signed by the President of the Community of Property Owners stating that there are no outstanding debts. You should be aware that if you later find that there are such debts outstanding, as the new owner, you assume the debts for the current and previous year (two years in total)
- as from 1st June 2013, all homes for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are considering buying a property, the seller is obliged to show you this certificate
On completion, the public deed should reflect an accurate description of the property. It is advisable that you register the property in your name with the Land Registry as soon as possible to ensure full protection of your rights. The notary can even send advance notification to the Land Registry electronically once the public deed is signed.
We have published further information on buying off-plan property in Spain.
If you decide to buy off-plan, or a property under construction, always insist on a bank guarantee (aval bancario) to cover your stage payments. All developers are obliged under law 57/1968 to secure all deposits received with a bank guarantee. Additionally you should ensure that your deposit is paid into a special escrow account and not into the developer’s general account.
We have published more information about bank guarantees.
If you are considering purchasing a coastal property you should contact the Coastal Demarcation office in your region to get a certificate to certify that the property is not affected by the 1988 Coastal Law. Bear in mind that while it is possible to view the coastal boundaries of the public maritime areas online on the Environment Ministry’s website, this may not provide sufficiently accurate information on which to base a property purchase.
Timeshare ownership is well established in Spain with many respected companies, agents and resorts operating legally and fairly. However, there are also many unscrupulous companies, some of which claim to provide various incentives (including stock market investments and discounts on airfares and accommodation) when exchanging existing time-share ownership or taking out membership of holiday clubs.
You may find it useful to read the timeshare fraud advice from Action Fraud, the UK’s national fraud reporting centre, run by the National Fraud Authority, and the FCO’s (Foreign & Commonwealth Office) advice to help protect yourself against timeshare fraud.
If you have a problem with your property in Spain, you may wish to seek help or lodge a complaint with a Spanish authority. Legal aid is free to those who can prove that they do not have sufficient resources for litigation.
Do your homework: you should analyse and compare a range of different products and services offered by different lending companies. If you have any doubts about the terms and conditions, ask the lender to clarify You should also check that the lender is authorised to operate in Spain on the Bank of Spain’s Registros de Entidades.
Look for the mortgage which is most appropriate for your capabilities and needs. There are a range of mortgages on offer and you should pay special attention to the interest rate and repayment period, fees for setting up the mortgage as well as early repayment and cancellation fees.
If you cannot keep up the mortgage repayments, the Spanish bank may repossess your property in Spain. If the value of the property is less than the total debt outstanding (you are in negative equity), the bank may pursue your UK assets to recover the mortgage shortfall using a European Enforcement Order.
Make sure you fully understand the mortgage agreement you sign. If you have any doubts check with the branch during the 10 working-day period after the binding offer has been provided. If for any reason you cannot keep up the mortgage repayments, you should speak to your bank immediately (before defaulting on repayments) to discuss the options available (e.g. reduce your payments for a set period, extend your mortgage term to reduce your payments, charge you interest only for a set period).
Further information on mortgages in Spain is available from the Spanish Mortgage Association.
Equity release schemes
The FCO’s strong recommendation is that anyone considering an equity release scheme seeks independent professional financial and legal advice to ensure that they fully understand the scheme and their rights and obligations in respect of it.
We have published practical advice which you should consider when contemplating investing in an equity release scheme.
Taxes and other costs applicable to property purchases in Spain
This information is aimed at British individuals (not companies) who are considering buying in Spain. If you are interested in selling your Spanish property, please see our separate guidance. The taxes you need to pay when you buy in Spain will vary depending on whether you are a resident in Spain or a non-resident, where your property is located, the value of the property, whether it is new or a re-sale.
Britain has a double taxation agreement with Spain, to ensure people do not pay tax on the same income in both countries. However, taxation is a complex issue, and it is advisable to seek the advice of an accountant or tax adviser with comprehensive and up-to-date knowledge of both the UK and Spanish tax rules.
If you buy a re-sale property you will pay the Impuesto de Transmisiones Patrimoniales (ITP).
If you acquire the property through inheritance or it is donated to you, you will pay the Impuesto sobre Sucesiones y Donaciones (ISD).
You should also be aware that in addition to taxes, there are a range of other costs when purchasing a property in Spain including:
- notary fees
- legal fees
- estate agent’s fees
- fees for a financial adviser (gestor/asesor) in Spain to manage your tax returns (optional)
- fees for a chartered surveyor or quantity surveyor
- mortgage fees -these may include a mortgage broker fee, an arrangement or opening fee, and an administrative fee for the bank to appoint a representative to manage payment of taxes and inscription of the title in the property register
- international bank transfer fees. You should discuss this fee with your bank in advance
- bank-guaranteed cheque fee: If you need to pay with a bank-guaranteed you should discuss the charges with your bank in advance
- fees to arrange power of attorney if required. Cost will vary depending on where you arrange it. If you arrange this in Spain the agreement needs to be witnessed by a notary
- furniture and shipping costs
- legal fees to make a will. If you buy a property in Spain it is advisable to have a will drawn up in Spain
Once you have bought the property, there are various ongoing costs, including:
- IBI Tax
- refuse collection and mains drainage (Basura y Alcantarillado) tax
- income tax (IPRF) or income tax for non-residents (IRNR)
- optional fees for a financial adviser (gestor/asesor) in Spain to manage your tax returns
- community fees, if your property is part of a community of property owners
- mortgage repayment (if applicable)
- building and contents Insurance
- utilities set-up costs and bills
If you spend more than 183 days in Spain during the tax year (calendar year) you will become a Spanish tax resident liable for Spanish income tax (IRPF). These days do not have to be consecutive.
Tax identification number (Número de Identificación Fiscal)
In Spain, all taxpayers are assigned a Tax Identification Number (NIF), which must appear on all tax returns and in all communications with the Agencia Tributaria (Spain’s Tax Agency). In general, for people with Spanish nationality, the NIF is the number of their National Identity card (Documento Nacional de Identidad - DNI) and, in the case of foreign nationals, the NIF is the same as the Foreign National’s Identification Number (NIE). However, those foreign citizens who do not have a NIE should request a NIF be assigned to them by the local Agencia Tributaria office.
- La Agencia Tributaria (Spain’s Tax Agency) and property taxes (in Spanish)
- contact details of Tax Offices in each autonomous community
- if you are a non-resident you may want to look at the Spanish Tax Agency’s webpage in English for non-residents
- Ministerio de Economia y Hacienda (The Ministry of the Treasury)
- The Land Registry (Registro de la Propiedad)
- FCO’s published information on [European Union citizens’ rights]
Letting a property in Spain
If you want to let your property to tourists on a short-term basis, you must ensure that you are doing so in accordance with Spanish law. The regulations on letting tourist apartments (apartamentos turisticos) and holiday homes (viviendas vacacionales) to tourists will vary depending on the region where the property is located.
If you are planning on making a return by renting your property, it is best to seek independent legal advice and check with your local town hall (Ayuntamiento) what the local licensing laws are before you buy. This is particularly important in Catalonia, the Balearic Islands and the Canary Islands, where the rental of holiday properties on a short-term basis is strictly regulated.
Owners who are caught illegally letting out their properties without the correct licence are liable for significant fines, in some cases reaching as much as €30,000.
If you are planning to buy an apartment which is part of a Comunidad de Propietarios (committees of property owners are responsible for the management of communal areas of apartment buildings/complexes), you should also check whether there are any rules that prohibit or restrict short-term letting.
You may want to consider hiring a Spanish letting agent to assist with finding tenants, drawing up rental contracts and managing the property on your behalf.
Owners who let their properties on a long-term basis are not generally required to apply for a special licence. However, it is worth seeking professional advice to make sure that you are complying with Spanish legislation and that you are using the correct rental contract.
As from 1st June 2013, all homes for sale or to let in Spain are required by law to have an energy efficiency certificate. If you are offering your property for rent after this date, you will need to obtain an energy certificate first.
In Spain, there are different types of contracts depending on how long the property is being let for, such as arriendos de vivienda, which are for a minimum of five years and arriendos de temporada, which are generally for one year or less. You can get copies of these contracts from tobacconists (estancos).
You must ensure that you declare your rental income to the Spanish tax authorities (Hacienda/Agencia Tributaria) whether you are resident in Spain or not. Taxation is a complex issue, and it is advisable to seek the advice of an accountant or professional tax adviser with comprehensive and up to date knowledge of both the UK and Spanish tax regulations.
This is not intended to be the only guidance to follow when considering purchasing, selling or letting a property. The FCO makes no representation as to the quality or accuracy of the information which is available at the web addresses listed in this guide, nor can the FCO accept any responsibility for the content that is hosted on them. The FCO’s strong recommendation is that prospective purchasers, sellers or landlords of Spanish property seek independent legal and financial advice at all stages in Spain.